No. 7 Does Gender Inequality Reduce Growth and Development? Evidence from Cross-Country Regressions By Stephan Klasen

Using cross-country and panel regressions, this paper investigates to what extent gender inequality in education and employment may reduce growth and development. The paper finds a considerable impact of gender inequality on economic growth which is robust to changes in specifications and controls for potential endogeneities. The results suggest that gender inequality in education has a direct impact on economic growth through lowering the average quality of human capital. In addition, economic growth is indirectly affected through the impact of gender inequality on investment and population growth. Point estimates suggest that between 0.4-0.9 % of the differences in growth rates between East Asia and Sub Saharan Africa, South Asia, and the Middle East can be accounted for by the larger gender gaps in education prevailing in the latter regions. Moreover, the analysis shows that gender inequality in education prevents progress in reducing fertility and child mortality rates, thereby compromising progress in well-being in developing countries.
 

This paper is part of a series of papers on selected topics commissioned for the forthcoming Policy Research Report (PRR) on Gender and Development. The PRR is being carried out by Elizabeth King and Andrew Mason and co-sponsored by the World Bank’s Development Economics Research Group and the Gender and Development Group of the Poverty Reduction and Economic Management Network. Printed copies of this paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Owen Haaga, in room MC8-434 or at Gnetwork@worldbank.org . Comments are welcome and should be sent directly to the author(s) at klasen@lrz.uni-muenchen.de .

The full-length paper is available in PDF format.